McDonald's(US:MCD) Fox Businessยท2024-04-12 18:11Core Viewpoint - California's new $20 minimum wage law is forcing fast food chains to adapt their business models, with franchise owners considering price increases and operational changes to maintain profitability [1][3]. Group 1: Impact on Franchise Operations - Franchise owner Scott Rodrick, who operates 18 McDonald's locations, anticipates an "unprecedented impact" on the franchise business model in California due to the new wage law [3][5]. - Rodrick has already raised menu prices by 5% to 7% in anticipation of the law, but emphasizes that further economic adjustments are necessary for survival [3][4]. Group 2: Strategies for Survival - The focus for franchise owners is on survival, which includes a combination of price adjustments, careful management of capital expenditures, and labor efficiencies [4][5]. - Rodrick expresses a commitment to maintaining his workforce of 800 employees, stating that layoffs are the last option he is considering [5][7]. Group 3: Long-term Considerations - The introduction of the new wage law raises questions about the long-term viability of operating franchises in California, particularly for the next generation of franchise owners [7].